Rich Investor, Poor Investor, Revived Thread

[Jim K.]

@Matthew Irish-Jones started what I think is a discussion of great worth while I was on my most recent vacation. I highly recommend it to everyone who's thinking about starting out:

https://www.biggerpockets.com/forums/12/topics/1142836-rich-...

I'd like to revive it, now that I'm back in the States. What ways would you recommend getting into real estate investing here in the USA.

I am NOT looking for your typical idiotic answer to the idiotic question of "What's the BEST way?" There is no best way. There never has been. There is no foolproof system, no magic road to glory, certainly no trademarked book or video or seminar that is The Way.

This is what Matthew pointed out in his initial post in the other thread. I've made some changes, but nothing that substantially changes the ideas presented:

Over the course of 12+ years as an investor, property manager, top 100 agent, construction manager, and a general student of business I have seen my own portfolio performance, as well as that of every investor we manage properties for. Below are what I see from investors that make it versus those that don't:

RICH INVESTORS ____________________________________________________________________________________________________________________

1. Buy great properties.

2. Or... front load the risk and build great properties by gutting and rebuilding units from the inside out, while having the experience and know-how to pull this off.

3. Buy great locations and pay through the nose for them.

4. Buy for long term equity and appreciation; they are OK with barely any cash flow if it's a great location and a quality asset.

5. Value asset condition over cash flow.

6. Value location over cash flow.

POOR INVESTORS ______________________________________________________________________________________________________________________

1.  Chase cash flow in C-class or lower locations.

2.  Buy crap properties that have 15% CoC returns and a ton of deferred maintenance that they fail to itemize properly.

3. Value cash flow over location and asset condition.

4. Look in high risk areas where no one else is looking...for a reason.

5. Buy inexpensive properties because they do not have enough funds to get into a B class location.

Do you agree or disagree with this set of characteristics, and if you agree or disagree with part of it, which parts? I've numbered Matthew's six "rich investor" points and his five "poor investor" points for easy reference. If you contributed to Matthew's discussion already, I'm sure you realize the value of reviving this, and I currently have quite a bit of time on my hands to keep it alive.

One of the basic courtesies I would ask anyone thinking of contributing to this thread is to at least read the profile of the person you choose to respond to before you write out a reply.

Matthew, I hope you're not insulted that I'm trying to revive your thread here. It's an important thread from a very valuable perspective.

[Jim K.]

Quote from @Theresa Harris:

Great points.  To the poor investor, I'd also add has no real plan.  For the rich investor, I might also add, has an exit plan and isn't afraid to change their plan if things change.

That's definitely a good point. To that I might add a corollary: a successful investor NEVER falls in love with a property. Not when they're buying it, not when they're fixing it, not when they're renting it, not when they're selling it.